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Embracing Blockchain: Why You Need to Prepare for This Transformative Technology

By: Melanie Cutlan

According to Accenture’s Intelligent Operations research, over 90 percent of enterprises feel they need to partner closely across the ecosystem to exploit market opportunities. But many players struggle to forge such close relationships due to data and process constraints that make it difficult to link their operations. Blockchain promises to change all that.

What is blockchain?

Most of you have probably heard the term “blockchain” by now. But many still don’t fully understand what it is, and prevailing misconceptions only further cloud the issue. At its essence, blockchain is a powerful new tool that enables traditionally independent players to work together to streamline and integrate processes. It overcomes the limitations of traditional database models, building trust into every transaction via attributes those traditional models don’t have. So all parties have controlled access to a single, shared copy of data, rather than relying on redundant, siloed systems. When deployed across a value chain, blockchain can deliver greater security, improved cost efficiency, more reliability, and optimized reconciliations—which can translate into hundreds of millions of dollars in gains for everyone involved.

In other words, blockchain is about new ways of sharing information together, rather than hoarding data at the center—distributing data across a network, putting you in control of where and how you interact with data that matters to you and your value chain partners. And it extends current efforts to automate key aspects of a company’s operations. Think of it this way: Streamlining operations is all about data, exceptions, and processing. That’s what automation does today. We operations professionals try to handle as many situations as possible with analytics, Robotic Process Automation, and other applied intelligence tools. What are we missing? Refining the process to be as straightforward and transparent as possible so we don’t have to automate things after the fact. That’s blockchain.

#Blockchain will eventually simply become part of the fabric of how you do business. Blog post by @melcutlan.

Blockchain can have a big impact on a company’s operations and the broader value chain, especially in three high-profile areas.

For instance, it can dramatically improve efficiency and working capital in finance and accounting, infuse greater transparency across the supply chain, and reduce vendor risk in sourcing and category management.

Blockchain also can transform entire industries, especially those with processes that have yet to benefit from digital technologies.

One example is using blockchain to manage commercial contracts, as Accenture is doing. Accenture and the companies with which it engages go through extensive efforts in finalizing contracts for services and managing them over the contract lifetime. The process is one that involves many people, steps and revisions. Accenture has developed a platform that digitizes paper contracts and puts them on a shared blockchain database. Every party can use the database to securely view, propose, revise, and execute contracts—ensuring everyone is working off of the same version. Select Accenture clients will participate in testing the platform, with broader expansion on the horizon to any company looking to leverage blockchain’s benefits for managing contracts. In the future, the platform has the potential to employ “smart contracts,” which are developed, agreed, and managed by code, and are suited for simple and transactional components of an agreement. Such contracts will help create further efficiencies in a process that desperately needs them.

Companies need to begin mobilizing now to determine how to use this transformative technology to tap value trapped in key operational processes.

A good first step is to evaluate processes using a formal framework to determine potential blockchain use cases, impacts, and benefits. Such a framework can help companies carefully think through how they’ll approach blockchain, what they want to accomplish and, importantly, whom they choose to collaborate with. We believe now is the time to start integrating Blockchain into your long-term strategy.

Blockchain certainly isn’t a one-size fits all answer to value partner challenges, but it opens the door for new ways of sharing information that will drive value. We believe it’s a capability that will eventually simply become part of the way you do business together

Blockchain is real and its potential benefits are significant. And it should be an important part of every company’s agenda.

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